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Sudima's conservative approach to success
A S a young entrepreneur, Anil Kumar Jhunjhnuwala felt that his father's approach to business was too conservative for his liking. But time and experience have changed those sentiments.
"I can see now why taking a conservative and calculated approach was the right choice," he says.
This approach to business has borne fruit for the managing director of Sudima International (Sudima).
Since its founding in 1994, Sudima has expanded with global business interests in manufacturing, international trading and distribution across four segments - timber, pharmaceuticals, textiles and agro produce.
Expansion beyond Singapore came almost immediately after as Sudima ventured into Myanmar in 1995. Myanmar may not have been the first choice for many in the mid-1990s, but in the case of Mr Jhunjhnuwala, his family has roots in that country and is well versed in conducting business there. His grandfather emigrated there from India before the family moved to Hong Kong in the 1960s, where his father still resides.
Although Mr Jhunjhnuwala was raised in Hong Kong, he has called Singapore home since 1997 - a decision he does not regret. His children were brought up and educated here. Singapore's role in providing a conducive business environment also played a part in his decision to settle down here.
"Traders based here have been successful because Singapore has well developed infrastructure, is a regional financial centre and an important shipping gateway," he adds.
In an increasingly volatile market stability holds the key for Sudima. While the trader is focused on four product lines, the diversity within its portfolio has contributed to the stability of the business.
"Three-quarters of our products are quite resistant to recession, which in turn, help to stabilise the business in periods of uncertainty," Mr Jhunjhnuwala says.
Of the four segments that Sudima plies its trade in, timber is the biggest, generating about 60 per cent of revenue. "I like timber because of the lack of volatility in the product. Price fluctuations are usually between two and three per cent in a span of a month," Mr Jhunjhnuwala explains.
Sudima first entered the timber business as a manufacturer of finished timber products. It has operations in Vietnam and Myanmar and its goods were destined for the US market. Eventually it expanded its operations into the primary timber industry.
Today, its timber business stretches from Indonesia to Ghana and its network of sawmills and factories produce processed woods like veneer and plywood.
"We should have good profitability in timber for the coming years and currently have plans to seek more opportunities in the old eastern bloc countries," Mr Jhunjhnuwala says.
Even though timber represents the biggest portion of Sudima's business, equal attention is given to the other segments of the business.
Much like timber, two of Sudima's other segments - pharmaceuticals and textiles - are also less volatile commodities.
Its pharmaceutical business, which started in 2001, sells its own brand of pharmaceuticals in Vietnam and Myanmar while Sudima acts as an agent for the import and export of textiles.
In contrast, with more volatile commodities such as agro produce - which may see price fluctuations of up to 20 per cent a month - Mr Jhunjhnuwala prefers mitigating risk through trading in smaller quantities.
For many small and medium-sized enterprises (SMEs), having a stable management team is often critical to its success.
Many members of Sudima's top management team have been with the company for the past two decades, and many of its country managers are long-serving employees.
"It is important, especially for SMEs, to keep the core management team for as long as possible as they are well aware of how the company works," Mr Jhunjhnuwala says.
This also underpins the importance of establishing interpersonal relationships and a sense of belonging among staff working in SMEs.
"I believe many members of my team have stayed with me despite receiving offers from multi-national corporations because of how I have dealt with them and the sense of ownership that they have towards the organisation," he adds.
Another facet of business operations that is intrinsic to Sudima's success is the importance of diligent business administration.
"We have quarterly reports out within two to three weeks of the quarter ending. Having the numbers at your fingertips is very important. It gives us a very strong understanding of what's going on in the business at any one time," he says.
On growth for Sudima, a healthy bottom line remains key for Mr Jhunjhnuwala as he has a preference for steady growth.
"This goes for all the possible opportunities we can take. We need to know what our bottom line is and the maximum losses we are willing to take," he explains. "With the global cycle getting more erratic, maintaining a steady yearly growth of 3-4 per cent is something that I will be satisfied with."
Even though Mr Jhunjhnuwala still has the better part of a decade left at the helm of Sudima, he is making plans for his sons to run the business when he does decide to hang up his boots.
"My sons will have to start the ball rolling on how they want to manage the business. They will have to build their own teams just like I have done. It is both stressful and exciting for me," he says.
However, the role of being his successors is not one that will be handed to them on a silver platter as there are no guarantees - especially in business. "They will have to work hard and prove themselves as you can't take things for granted," he says.
On top of his succession plans, Mr Jhunjhnuwala is also expanding Sudima's procurement centres in markets such as Australia and pursuing other business interests in Myanmar and Vietnam.
"With the improving economy in Myanmar, we are looking into expanding our import business there," he says.
Another growth opportunity lies in the hospitality industry in Vietnam - an area he first looked into three years ago but his plans fell through due to difficulties in getting the appropriate funding for the project.
But with government policies that are increasingly pro-business in Vietnam, the outcome may very well be different this time round.